Alphabet Records Impressive Earnings, Proving Google’s Mobile Ads Strategy Successful

Alphabet, the parent company of tech giant Google, has released a sterling earnings report for the third quarter. In sync with the season’s trend, these earnings have exceeded Wall Street expectations.

Time for a quick rundown of the figures.

Total revenue hit a whopping $22.45 billion at $9.06 a share, outstripping expectations of $22.05 billion at $8.64 a share. Looking back, this figure stood at $18.7 billion at $7.35 a share this time last year. As anticipated, Google was the main income contributor within the Alphabet group. Google’s ventures such as Nest, Google Fiber, and Google Ventures also showed promising growth, accumulating revenue of $197 million versus $141 million last year. In the second quarter of this year, Alphabet reported $185m from these additional ventures, a notable surge from $74m during the same period in 2015. Losses for these entities widened to $859 million from $660 million, but in the third quarter, those numbers scaled back to $865 million against $980 million the previous year. Alphabet also announced plans to repurchase up to $7.02 billion in stock as part of their earnings report.

Google’s ad revenue saw an impressive rise of 18.1 percent, topping off at $19.82 billion in the third quarter. This figure accounts for a massive chunk of the earnings reported by Alphabet. In fact, Google now boasts an 89.1 percent share of the total revenue for the entire group. Upon closer examination, it appears that Google’s keen focus on mobile advertising has been a significant factor behind these stellar numbers. Mobile advertising has been at the heart of Google’s recent successes, and it seems like this strategy is starting to pay dividends. We recently reported on Google’s decision to build a separate search index specifically for mobile users, enhancing the search experience for this fast-growing audience.

Paid clicks saw a robust growth, soaring 33 percent compared to 29 percent in the second quarter, while the Cost-per-click, the amount an advertiser pays Google for each click, decreased by 11 percent, building on the trend seen last quarter when it fell 7 percent.

Some analysts project Google’s drive into video advertising via YouTube could further bolster the company’s revenue in the upcoming fourth quarter. Currently, Google dominates the digital ad space, followed by Facebook. During the last quarter, Google held a market share of 31 percent, with Facebook trailing at 12 percent. Precise predictions remain elusive until Facebook releases its earnings report.